City loan could be a bullseye

Thursday

Jan 31, 2013 at 3:15 AM

Rochester granted its biggest ever business startup loan this past week in the amount of $100,000. The recipient was LHR Sporting Arms, with their newly operational manufacturing facility located just off Lowell Street. LHR is the third spinoff of Thompson Center Arms, which was bought by Smith and Wesson and consequently had its operations moved out of the area.

LHR is the first offshoot to rekindle firearm production. They do their own rifle design and manufacturing. Notedly, the first two spinoffs, Coyote Creek and Thompson Investment Castings, also stayed in the city limits, and Rochester residents should feel pride for the display of loyalty by all three companies’ owners.

We feel LHR is a fitting recipient of the JOB loan, not for sentimental recollections of 500 employees heading into work at Thompson Center Arms in its heyday, but because many of those skilled workers are still in the area. Having a selection of the exact employees you need when you need them is a huge benefit for a startup business.

Additionally, the four partners who started LHR are former Thompson Center workers with 80 years of gun manufacturing experience between them, and each with his own area of expertise.

The JOB loan, which is funded through the U.S. Department of Housing and Urban Development (HUD), will initially be used for working capital, according to Mark Laney, LHR’s vice-president of research and development. However, thanks to the loan, the team expects to begin hiring employees in March, totaling 8-10 by the end of this year. It’s a far cry from Thompson Center Arms in the mid 1990s, but it’s a great start.

Arguments can be made against government helping private businesses. It’s certainly a debatable point, but we feel an investment by the city can pay much bigger dividends in the long run, not the least of which is the possibility of many more Rochester residents employed, paying taxes and another booming business paying back the loan with interest as well as their share of taxes.

The JOB loan itself is designed as rotating capital. As businesses pay back loans, the payments become available to help other fledgling, but promising companies. The city loan also is a sign to other lenders that the city has done its research on a company and has confidence in its future. It helps grease the business wheels to give the company the greatest chance of success.

As with any investment, risks are inherent. If LHR fizzles and fades, taxpayers could be left holding the bag. As Rochester’s Economic Development Specialist Mary Ellen Humphrey notes, though, the involved players bring a huge amount of talent and experience that gives them an advantage.

The first rifle to roll off the assembly lines is “the Redemption,” a muzzle loader and the kind of firearm for which Thompson Center Arms was famous. It is in the process of being shipped now. All bets are on the Redemption being an aptly named rifle.